The Wolf Of All Streets - Is The Bitcoin Bottom In Or More Pain To Come? | Crypto Town Hall

Episode Date: February 26, 2025

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Hi, everybody. Happy Wednesday. Welcome to Crypto Town Hall every weekday, 10, 15 a.m. Eastern Standard Time here on X. Did I just do it now, Carlo? Good morning, Carlo. Should I say that? Good morning, Scott. We've gotten in a habit. Carlo and I had a call at like 5 p.m. yesterday and he said, good morning, Scott, picked up the phone. It's a thing now. It's what we do. It is. It's what we do. So, listen,

obviously all anyone wants to talk about at times when there's a dip is why Bitcoin might be dipping, when the bottom will be in, what's likely to happen in the future because we all apparently have very, very efficient crystal balls to look into to predict what's coming. But we have balls to look into to predict what's coming. But we have the usual sort of bipolarity and predictions right now we have some like Arthur Hayes famously calling for the 70,000s, which to be fair, he has been doing for a couple weeks, not just since price has been dipping. And then others saying that they think that the bottom is in here. I just had Matt Hogan on my show this morning on YouTube. He believes that we are bottoming. I think it's important to remember bottom isn't necessarily an exact price to the penny,

but it's sort of a process. The area here likely being a bottom. I know that Andre from Bitwise is likely to join article on CoinDesk. I think it was CoinDesk about him saying he thinks that the bottom is in here. So Bitcoin did make a slightly lower bottom today, but interestingly, I think in basically the last hour, I'm looking at the chart here, sorry, I'm mobile today, but trading at 88,157, just an hour ago, it was 80,

well, now we're looking at 88,000 flat basically, but it was about to touch 85. So almost a $3,000 candle spread on the hourly over the past hour or 90 minutes. So let's jump into it, Carlo, go ahead. Yeah, so look, man, I've been kind of talking in my daily little crypto recap that we need to focus on the long term effects of what's coming.

If you look at all the negativity on X and the nihilism about what's happening because of the correction, you lose sight of the bigger picture. We are in an era of unprecedented regulatory clarity and coming into the sector. We just had Uniswap's Wells Notice action get dropped. We've had OpenSea's Wells Notice action get dropped, the Coinbase dismissal, the SEC's backing down against Robinhood. And I think Scott, that we need to remember that,

number one, there's a broader conversation to have here about what's coming because there's definitely a disconnect between people like Matt Hogan at Bitwise who are on the institutional side who see exactly where this is going and retail, which is, you know, getting most of their information from a lot of the posts they're seeing on X and a lot of the negativity. However, zoom out from that and understand what's coming and you'll see that number one, as you I'm sure are gonna tell the crowd, corrections are to be expected and are normal and healthy.

And also a bigger takeaway that I've been thinking about is Trump has a bigger strategy here. I think what Trump wants to see happen through the SEC is a change in their mandate where they're no longer going after existing firms that are providing value to consumers based on this notion of investment contracts and probably pivoting to more of an anti-fraud agenda. Because in order for the Trump family's stake in crypto to go up and to pump their bags, they need to see consumer adoption of crypto. And you're not going to get to consumer adoption of crypto as long as you've got rampant fraud

in the meme coin space and in other sectors of crypto. So I think we're going to see a tremendous pivot here. We already see that the SEC no longer has a interest in pursuing the previous agenda's enforcement actions, and we're now going to shift into more of a fraud-based agenda, which I think ultimately is good for the sector. It's good for our bags. Dave. Yeah, it's funny. I wrote two posts over the last two days, one last night and one this morning. Yeah, one was someone asked the question, you know, do I ride this down to zero to where I

sell now and take profits. And so I explained that there's a big difference between things you buy for momentum, and things you buy because you're you believe in the long term in the prospects. And what Carlo was talking about is all on the long term and the prospects because in that particular case, unless your thesis is changed Don't sell right? It's pretty straightforward now if your thesis changes and sell the the the the the regulatory changes basically Reinforces the thesis for most of crypto outside of meme coins

but the thing about meme coins is is a lot of money went there because Frankly was the only thing you could do with the SEC wouldn't sue you. So you knew, and I've been saying this for months, so you knew that some something's going to come out of that sector. It's going to be the gambling that it's going to be. It's not going to die. You're still an attention economy. In fact, you're going to see the rise of memes where they're proud of promise a percentage of profit to the community for eyeballs and advertising and all this stuff. You can lock that one down that it's an absolute certainty, but in the back half of this year, because it's going to be legal. Now, the other post is how Arthur Hayes' statement about the expiration and about the carry trade

is a completely oversimplified and likely going to be directionally wrong call. And I went through that in detail. Anyone can read it. It was a re quoted view, Scott, so you should you can find it. But basically, the TLDR is when you get an expiration that everybody knows, unquote, is going to be a big sell. It generally turns out to be a non event or a buy. And what that means is that people who are going to sell have already sold. And I think that's why you saw

the bottom this morning, I think people started to realize, wait a minute, there isn't enough open interest left to sell, you know, of spot and to allow the futures to expire. And people can go through that. But I think it's really important to understand this stuff, because fear drives a lot. Your show with Matt, who was awesome this morning, is a must listen, let's listen to the first 15 minutes of it, and you'll understand my case, because I agree with every word you said. a lot. Your show with Matt, who was awesome this morning, is a must listen. Just listen the first 15 minutes of it and you'll understand my case, because I agree with every word you said.

Yeah, that all makes perfect sense. I think that we know that, you know, Carlo, what you were mentioning before, that if you go on crypto Twitter, everybody is seemingly depressed. It's all over its bear market. Well, it's important to remember that the bulk of those people who are there and tweeting about crypto every day are getting absolutely annihilated and washed out in altcoins and in the mean market. And most of them probably don't even hold Bitcoin. So it's a very, very, very big, big difference. I mean, Robbie, what do you make of the altcoin market at the moment?

Obviously, Solana kind of leading Nikul off there, which makes a lot of sense after Libra and sort of, you know, pump fun selling off a lot of their Solana. Hey, sorry, my connection is quite slow today. So I think a friend of mine put it best yesterday, I think maybe alt season needs to get turned off and turned back on again, perhaps, and we can correct things. So we blow on the cartridge? Yes, exactly. But I think, to be honest, you know me, I'm always looking at things in a longer time horizon. So I'm not the best person to ask for trading strategies or investment advice because I'm a long-term optimist when it comes to alts of all kinds. Well, frankly, it's not just alts, it's Bitcoin and everything else too.

But I do think that ultimately this year is gonna be a fantastic year for crypto generally, but particularly for stuff that has gotten less attention over the last six or nine months. And it's just a matter of kind of things settling down a bit. And I think that there's obviously been a lot of news, there's been a lot of political turbulence and things over the last few weeks. And so I think that frankly, we just need a little bit of a break

from distractions of other things for people to feel like maybe they're getting back into the trenches again. And so I think weeding out some of the bad news around meme coins, I think actually will be quite helpful for people to focus back because clearly I see a lot of stuff, I mean, all over the conversations I've been having both at events and on crypto Twitter with people who are really in search of fundamental value again, meaning, look, I'm interested in projects and tokens related to those projects that are doing well, that are doing exciting stuff, that are getting users and communities excited. And personally, I think that's great because I think that actually sort of spreads the love far beyond just what's happening in Bitcoin or a particular meme coin.

Robbie, when you mentioned obviously sort of value coming back to things that have been forgotten or that are just less compelling narratives or less hot at the moment, what specifically are you thinking about? Which buckets? So I'm thinking obviously, you know me, we've always been big advocates of NFTs and things that have to do with culture. And I think that's everything from PFP community collections. And I mean, you know, ones that are long term sustainable, like if you see what's been happening with the MiBits community recently, now that we've had some changes there, I think they're getting reinvigorated and excited. We saw the same thing happen around the Pengu launch with the Pudgy community in December,

and now we're going to see, you know, launches of lots of other things, new interesting new games coming up as well. There's a couple of things coming out on Telegram that are going to be more akin to kind of double A games soon. So I think this kind of stuff is going to really get people excited. Simon. Yeah, I mean, when I'm describing Bitcoin, I'm always trying to look at what is the next three cycles of adoption. And we always think of a cycle in terms of four years, whether that remains a thing or cycles of adoption. We always think of a cycle in terms of four years, whether that remains a thing or not,

based upon the fact that so many Bitcoins have been mined at this stage. But if you're not zooming out and seeing the bigger picture of the problems that Bitcoin can solve, then you may be confused into thinking that we just had the largest hack of an exchange in history, $1.4 billion. Historically, in the Mt. Gox days, in the Bitcoinica days, in the Cryptsy days, in the Bitfinex days, in the Bitstamp days, in the FTX days, we've had approximately 40 to 60% corrections. We just got a 20% correction in Bitcoin with the largest hack that has ever happened on the Ethereum side, granted.

But normally, this is such a small correction relative to what that is and what it has mean historically in the past. And the reason for that is because at the moment, it's all about scaring retail into selling to the person that's actually got a multi-cycle theory of what Bitcoin does. So when I look around the world, I see an America that is about to adjust to try and become crypto capital of the world, a recalibration of the dollar that potentially needs to hedge against the Federal Reserve System into something that may look like Bitcoin strategic reserves and stable coins at its extreme. I see a Europe that needs to re-collaborate as well, and they've just released their MECA regulations and a series of financial institutions all across Europe that need to adjust to this.

across Europe that need to adjust to this. A bunch of countries that all need Bitcoin strategic reserves in order to hedge itself from an environment where these regions may break up as a result of the policy of the European Central Bank. I see a Middle East that needs to repurpose energy and can use Bitcoin and Bitcoin mining as the potential to hedge against certain industries. We see a war for artificial intelligence across China and America that all relies upon energy and all of those data centers and energy providers may need Bitcoin as a hedge in order to manage some of the volatility in those data centers as well. I see a potential competitor or a new play for global trade across bricks that naturally is not going to be able to figure out the problem of how do you do a distributed ledger and remove gold risk? And Bitcoin will be a small solution that could lead to a large solution.

And I see England that can't deliver upon its gold right now and is putting a six-week delay at the same time as America deciding to audit Fort Knox and figure out whether the gold's there. Bitcoin fixes many of those problems over the long term, and every country across the world, and you as an individual get to buy it cheaper here before they figure it out. Amitayu. Well said, Simon. I was really thorough. Good morning, Scott. I got to get in on that. Good morning, Am. I got to get in on that. Good morning, Amitai.

First and foremost, I just want to celebrate the fact that we're getting closer to a Russia-Ukraine peace deal. I think that that is just unbelievably significant. I'll kind of believe it when I see it, and I think many others will as well. But what we're seeing here is, is all of a sudden the world's starting to reach a place where there's less geopolitical uncertainty, and it's being replaced with global trade and economics, which is very exciting. I think that's just monumental. You know, I can't help but wonder if the fact that we didn't get a 30% or 40% correction on Bitcoin due to the hack and all the craziness that we've seen was due to this kind of prophecy that's been talked a lot about is that Bitcoin volatility will start to be reduced based on the

size and scale of the adoption as well as the price that is reached. Now, that doesn't mean we can't still have continued correction here or more, but it just makes me wonder if that's the case. At the same time, we think we're seeing Bitcoin dominance hit 65% without stables, which is pretty high up there. We've never had an alt season that didn't start on the heels of a capitulation event. And so while people were calling for this, kind of at the top of the meme cycle, obviously that really, really needed to flush.

It was really healthy. I agree that we're sort of entering this more anti-fraud based agenda. In addition with stable coins, that seems to be the primary. We're seeing like these meme cabals having started to vanish. It makes me wonder, did they get letters? Are things starting to happen? But there's a spooking that has definitely occurred that's been catering to this reset.

And I think that there is some kind of new meta, new narratives that you can touch on a little bit, but I think it's phenomenal. So the SEC dropping the lawsuits is so big. So big. And I was going to say, talking about the cabal is maybe they got a letter. I mean, anything is possible, but I think it's even simpler than that, which is that crypto has a natural, for better or for worse, way of sort of self-regulating the market and the community. And I think that the just general awareness after Libra of how ugly and fixed the meme coin market, specifically on Solana has been pretty much probably just put fear in everyone's hearts and has largely stopped that behavior. There's one of those cases where I think it just the pendulum swung way too far.

You know, Libra was just way too gratuitous and then digging into what happened there. I think that has been a major, major, major flush. And I mean, Matt Hogan even mentioned, I think it was Matt this morning or someone here, it all gets mixed that, you know, we also had the fact that there was this moment when after the buy-bit hack, it looked like North Korea, Lazarus Group was going to try to launder the money through Pumped Up Fund. Right. And I think that scared a lot of people off of that market as well. I mean, Edie, what are you thinking right now about sort of the status of the market? BD, what are you thinking right now about the status of the market? Amateo's point, obviously, about dominance, I think, is well taken and worth discussing

because there has been no altcoin bull market yet. Yeah, I think these guys all said it. Dave mentioned we've seen just some massive events, obviously, the hack, and barely dropped. Amateo said the same. We're two months into 2025, and so far, the cycle and barely dropped. Amiteo said the same. We're two months into 2025 and so far the cycle hasn't gone. I'm pretty sure like any of us have predicted lawsuits dropping, potentially end of the world war. It just seems like everything is setting up for this massive bull run and adoption. But I've also said it in the past that we're also not ready for it security wise.

I personally do not believe so because of the tools, the UI, the security hacks and the interoperability is lacking. I don't recommend crypto honestly to many normies if they're looking to get into whatever some of the utilities that are out there, which are pretty few and far between, honestly, right now, the primary utilities. But we have a long way to go before the space is secure for the average person. And that's because I just look at how many people, and I've said this before, look at how many people still click links and emails and they lose their, they get their computer hacked or whatever. Big deal.

Maybe you lose your credit card and you call your bank, they fix it the next day. It's not the same in web3. Look at what happens on a daily basis. People are losing their life savings due to simple mistakes that are going to continue to happen until we improve the infrastructure and stop having shit like this by bit hack in the daily hacks we see. Yeah, absolutely. I agree. Bill, what are your thoughts? I personally cannot hear Bill. Can you guys hear Bill? No. Okay. All right. Bill, we're gonna have to drop you and bring you back up. Dave,

Dave would love you to jump in, unpack everything we've just heard. Well, I mean, I agree. And Simon, please, please don't fall off your chair. But I agree with about 98% of everything that Simon said. I think that when you zoom out, this is going to be, I actually am more bullish today than I was in the beginning of the year

because we've seen some of these washouts. But I do think it's really important when you talk about the regulatory side to understand what that really means. It does have implications such as this carry trade is going to be gone. There's no need for a carry trade in the world where the US broker dealer community is not allowed to buy anything other than Bitcoin futures if they want to get long Bitcoin. So you won't have a structural carry trade. Now, is that a good thing or a bad thing? Well, it's actually a good thing because you know, we've seen that in multiple markets, you know, Japan

basically took a decade or so to get rid of their structural reasons for a carry trade. And so as a result, their market was manipulated and played round with forever. And that's going away. So a lot of the fears that people have in the Bitcoin market of what futures can do, they're disappearing. So that's something that's worth understanding. The other big thing is that projects, new projects are going to emerge that actually pass on real tokenomics to users. We haven't had that, right? You know, ICOs are not quote, non dilutive

capital. Basically users get crap and be happy for it and hope they make money and the founders do well. Then we had mean coins, users get even less crap and the founders do even better. We're going to see, but it's gonna take time, that's gonna happen. And what you're going to see is you're going to see

projects that do exist, change their tokenomics to the extent that they can you know It's funny. I just saw on on X that Patrick and Henry joined the board of a 16 Z Well, if I was sitting at a 16 Z, I would be pivoting my strategy rather hard right now. Wow, I Did not I did not see that but that's crazy Especially on the heels of Brian Clinton's leaving a 16 Z to head the CFTC Yeah, there you go heels of Brian Clinton's leaving A16Z to head the CFTC. Yeah, there you go. So but the point is, is it's if you're a project and you're trying to raise money from A16Z, they

know where the winds are blowing. And they understand what I just said, and if they don't, they should call me and I'll explain it to them for a fee, of course. But you know, it is it is a we are going to see a very big sea change. So effectively investing now is more like looking is more like 2016, you know, in the crypto space than 2017, 18, right? You know, it's the seeds that are being planted and we'll see what happens. It doesn't mean that the things you're buying aren't going to do well, but you need to be

very, very careful. And I think it was Billy that said, you know, there's precious few out there that actually are going to survive and have real value. I think that's probably true. I would phrase it differently. I would say there are precious using their survive in their current form and have value. Yeah. Talking about the sea change, I just want to build on that. So that you retweeted, Scott, that the RWA issuer, Undo Finance, joins the MasterCard network, which is pretty fascinating. We also saw that Avalanche just launched a Visa card allowing for the processing of stablecoins and AVAX at Visa merchants. We've got the Digital Assets Subcommittee that Cynthia Loomis is spearheading today.

And we also have Bank of America announcing the stable, stable, stable coinization of the dollar. So, yeah, I didn't see the CEO's quote. I didn't see it exactly. Just so people know, he basically said stable coins are coming, right? He also said that that stable coins are essentially just a form of banking because it's backed one-to-one by the dollar when they're registered. So, I mean, I'm always gonna come back to this, which is years ago when we were exploring,

connecting the crypto rails with traditional banking and MasterCard and Visa, they were giving like a 10-year time horizon just because of how slow they move to adopt and innovate tech. The rails are being built at a speed that I don't think we've actually seen in TradFi in a very long time. The adoption, the integration, the rails are getting really well wired up here. And I think that that is extremely promising from both a liquidity perspective, but also just a normalization of crypto and stablecoins

as assets that people interact with that just completely goes mainstream. I just don't know how you look at that and not get really excited for this year. Yeah, well, crypto native companies, I mean, the first example of this will be stable coins haven't had to compete with TradFi yet because there hasn't been the regulatory clarity that TradFi needs to get into the space in a meaningful way.

That's definitely going to change. It's going to first change with stable coins. And the question is what that means for crypto incumbents when they're competing like USDC and Tether are competing with Blackrock USD and JP Morgan USD and other sort of like high trust issuers. I think stable coins is a topic worth staying on at the moment. There were a few stories around them and Zach, I totally agree with you. There's a few stories around them. One was kind of small but interesting, which is that the Singapore-based stores, department stores, Metro are now accepting stable coins, which I think is just one more

big step in the path of adoption. The inevitability that stable coins will be accepted basically everywhere, especially when you know that PayPal has a stable coin and the banks will have stable coins and Stripe bought Bridge for unicorn billion dollars. The other though is Jeremy Allaire giving an interview today that we talk about, Zach, the incumbents having to compete with the banks, but we still have the incumbents competing with one another. And Jeremy Allaire basically taking shots across the bow of tether saying that regulated stablecoins in the United States should have to fall under basically the same laws as everybody

else in the US basically say, hey, Tether needs to like get in line with the US banks and be compliant and effectively alluding to the fact that Tether should not be able to operate in the United States. So did anybody see that or have some? Yeah. I mean, if you ask anyone who's been working in policy circles, that's been happening in the background for a while.

This, you know, it's the knife fights become a little more public, but the circle's been knives out for tether basically since it was Trump won and it was clear there was going to be a more friendly stablecoin regime. Right, and so in fighting before they're going to have to fight the banks, which is an interesting scenario, Dave. Go ahead. Yeah. Sadly, it's a tale as old as our bureaucracy itself, which is regulatory capture and use of regulation as a competitive weapon, which is, in my mind, philosophically disgusting. And it's a shame on him. The reality is, is I worked on Wall Street for 30 some odd years, spent decades going

down the fourth for the SEC, being in industry committees. And I can tell you that is literally the normal process for stopping disruptive competition is to use regulators. And it is extremely painful to know that politics has not changed. And despite Elon Musk and what Doge is doing, it's probably gonna continue. But the idea that Tether, which is mostly used, let's be honest, as the bridge to buying and selling crypto around the world, would be banned to US customers, considering that the whole point here

is that US customers should have access to the entire universe is problematic. I mean, what needs to happen is really the opposite. There needs to be, they should submit to US audits and the same audit regulation. But the idea of having stablecoins being held only by banks is the exact opposite of safety. Just keep in mind, I mean, I'm going to channel Caitlin along here, but we have a banking regime in the United States where most banks are fractional reserve. So, and which means that they are, they are vulnerable to bank runs and you're effectively letting the fed backstop it. The whole point of stable coins is to have assets that are fully backing,

which means you shouldn't need a backstop. Silicon Valley banking under banks. The idea that being in banks, which of course, circle did and needed to be, you know, their investors need to be reassured. And Silicon Valley Bank needed to be saved. It's just it's exactly the opposite of the way it should be. So yes, I'm just I'm angered. But I also understand that it's highly likely to be a pretty major fight.

That's right. I mean, I don't remember the exact number, but I think it was roughly 10 billion, excuse was roughly 10% of USDC's backing was in Silicon Valley Bank, roughly $3 billion at the time. So the biggest risk to a fully backed stablecoin was where they were holding the assets that they were fully backing it with. And Paolo Arduino from Tether pointed out that with MECA regulation, the biggest threat to Tether would be the amount of dollars or currency that had to be held in banks as a requirement for MECA. So I guess, ironically, the biggest threat to the stablecoins is where you can actually store the money that you're

backing it with. Go ahead, Simon. Yeah. Well, as somebody that's a shareholder in both Circle and Bitfinex, I'm aware of the politics between the two. But there has to be a sense of the bigger picture here. If you weaponize regulations in order to try and get a regulatory silo within America, you're going to end up with regulations that ruin the design of stable coins, which is that they're completely global markets that can be sent anywhere. So if we then add a travel rule and the ability to determine whether the recipient is resided in the US, you suddenly got on-chain KYC, the ability for how does it impact VPNs, what does it mean when someone's traveling,

and you basically recreate the banking system and break the entire market. So this one we have to be very sensitive about and recognition as well that this is probably a future market for treasuries a future market for treasuries in a changing environment of what the financial system may look like. There is a massive market for people that want to engage in a dollar stablecoin, but never actually touch the physicality of the US because they don't want to be subjected to withholding tax when they're not doing anything in the US because they don't want to be subjected to withholding tax when they're not doing anything in the US. The vast pools of capital also exist in environments where it doesn't touch the US, and that's

a very large pool of capital that could be tapped into. I'm hoping the type of thinking that the Trump administration, you know, and a business thinking America first type of environment might be able to see through that and see the opportunity, rather than create this fragmented market that breaks everything. And that would only serve the banks and financial institutions that would be lobbying for such things. that would only serve the banks and financial institutions that would be lobbying for such things. Yeah, I was actually just going to ask a question around the stablecoin line and what he was even saying, Simon there. Obviously, both of these stablecoins, the two primary ones, are completely centralized and some people may not know that they can be frozen, stolen, wiped at any given time. Do we believe there's going to be a truly decentralized stablecoin in the market that's going to have dominance at some point? Well, I mean MakerDAO still exists and the stablecoin,

whether that model will dominate, I think what the history of the world has always shown is that custody and ease of use is always a bigger market than the market for decentralization. But we are also moving to an environment where controlling your own data is a future skill that all young people will need to understand. And so I'm hoping that this friction of the younger people being brought up on crypto and Bitcoin and doing things in a DeFi type of world is going to crowd out the custody type of people eventually, and everybody ends up owning their own identity, ends up owning their own thing. Now I know that is the battle of the future. And the battle of the future is, are we going to have decentralized artificial

intelligence, decentralized money, decentralized social networks, or are we essentially going to be fully controlled by artificial intelligence because we gave all the data to the centralized company? Welcome to the next 10 years of battle. And whether we do it decentralized or centralized is going to determine the future of humanity, quite frankly. Yeah, I mean, in the short answer to your question, DB is no, they will not be dominant. There's no way with the trajectory of stable coins currently that a decentralized token, even though it's amazing that we have them, decentralized stable coins, you want to dominate.

There's no chance they're way too far behind even now without the regulation. Amitayo, you had your hand up, Sam Paul. I was going to shift gears, you guys went pretty deep. So go to Paul. I want to take the opposite stance. I think decentralized stablecoins are actually our only hope in the future. If anything, mainly because without a decentralized stablecoin, we're not going to be able to have a private payment method if we actually intend to use

stablecoins in any way, shape or form as actual payments, we'll need some level of privacy. I'm not going to want to go and pay for something in a merchant and have that merchant know the entire balance of the source address of my wallet that held that stablecoin. And as Simon said, MakerDAO has been stable over the course since 2017. Now, granted, they did add USDC, which I think was one of the big issues, and they just had a really bad name. I know as an example, we used to integrate an off-ramp that supported USDC, Tether and Dai and most people did not know what the hell Dai was. It just had really bad branding. And for all of you that think that if you're still having PTSD over Luna and Terra,

realize that the stable coins that have de-pegged have traditionally been backed by a very volatile asset. The ones that have been backed by Bitcoin, which many people aren't aware of because they've been on smaller chains like Rootstock, have been incredibly stable. So backing a stable coin algorithmically by a stable asset such as Bitcoin is a method that has worked in the test of time, but it just hasn't been adopted by a lot of the exchanges. So fundamentally, I think there is a hope for stablecoins and our world absolutely needs them,

both from the viewpoint of privacy. And I don't think any of the stablecoins out today that are actually backed by dollars in a bank account are going to be allowed to be put on a private layer blockchain, such as what's coming out with Zano and actual confidential assets. So, you know, I hope it does happen and I think it absolutely can

and absolutely needs to. Yeah, I agree with you fundamentally that that would be better. I just don't think it happens with the trajectory that we're going. I'm not saying that they'll disappear or be marginalized. I just can't imagine the dominant stable coin in the world, especially as we move into a higher regulated stable coin environment with legislation. I can't imagine that's the one that's going to win, if that makes sense, especially when we start having JP Morgan coin and BlackRock coin and Goldman coin. No, it's true for sure from the viewpoint of regulation.

You have to ask also why is the regulation coming out such that it is very pro-dollar backed stablecoins and very anti-algorithmic backed stablecoins is because they cannot be controlled much like Bitcoin. So one has to ask the question like, what do you think the world really wants and needs versus what existing governments want to drive the public towards? Dave. want to drive the public towards. Dave. There are two things governments care about. They care about getting their tax revenue

and they care about going after bad guys. That isn't going to change unless we have a complete global revolution. As a result, there will be no algorithmic stablecoin dominance in the stablecoin market. It will be backed by fiat until fiat disappears. That said, what the hell is wrong with Bitcoin? Why is it that you need a stablecoin backed by Bitcoin?

Maybe, you know, you talked to Iago up here. He would be explaining to us all about the way you can use Bitcoin on layer 2s and other ways to actually provide for that peer to peer and have a decentralized network. My brain doesn't understand. When basis came out, I thought it was bullshit. I was right when Luna came out and Tara came out, I thought it was bullshit. Maker DAO is different because it actually does maintain a peg. And so that's fine. But the reality is there's no need for it. There's no product market sit for it. People don't give a shit. Simon is right. They don't care. And frankly, the ones who don't want to be backed by Fiat and backed by government

should be using Bitcoin. And I just don't understand this. I mean, I know, I know lots of money on the VC side keeps going into this. I just don't see the product market fit. I would love to be educated otherwise. love to be educated otherwise. Simon? Yeah, again, I think it requires a bit more imagination than the existing paradigm. I come from a belief that we're actually entering to an era where artificial intelligence will make governments irrelevant and tax collection impossible. And I think we're moving in the next 10, 20 years to that level of disruption. And so the governments will hold on for as long as they can into tax collection and stopping the bad people until artificial intelligence says,

sorry, we can do this better than you and we can manage banking system better than you and we can manage a central banking system better than you and we can manage banking system better than you and we can manage a central banking system better than you. And so what I think we should be doing is preparing for that type of disruption and environment. And one of the really interesting developments is the concept of tether on a lightning channel and the possibilities of people being able to lock up their Bitcoin, receive yield for opening up a channel all native on the Bitcoin blockchain, and then be able to build some kind of quasi-financial system using stablecoins. And the reason for stablecoins is because as long as your goods are priced in fiat currency You don't want to take price volatility and managing your financial services

and so I think we need to get back to We are we need to be building we need to be building fast We have got so much more to build and the opportunity of actually being able to have stable coins on lightning with private transactions and open channels is something we need to be ready for because I think artificial intelligence will choose such a system eventually when governments can't collect tax anymore. So I think one of the issues with that example you've've got, Simon, and you're right, Lightning does offer an enhanced level of privacy. And that's privacy for all of us, obviously, all of the people that just want to make payments.

But imagine just the first time that someone puts on the dark web, here's my Lightning invoice, please send me USDT to it in order to buy kiddie porn. As soon as that happens, Tether is going to be targeted and targeted very heavily because it's now a fully private transaction where we can't see who that went to. And that will be true for any dollar backed stablecoin. And hence, really the only way to get the dream that you have, Simon, on a private, I'm going to call it a protocol, not necessarily a blockchain because lightning's more of a protocol, but any private protocol is to have an actual algorithm at coin where you don't have a central

party that you can just simply target. Yeah, that's exactly agree with that completely. So eventually it will get there and it will start with Tether. And then that's the important. This is the friction that we're going to be going through. That's why anybody that's panicking about price today, take a step back, recognize that you are alive at one of the most exciting times in financial history,

and recognize that we've got a multi-decade strategy of innovation ahead, and we're only at the beginning. I think those are perfect words to end on here. I have to actually run, so sorry for wrapping a few minutes early. Everybody in the audience, please give everybody on stage a follow.

They're all amazing and worthy of your following here on X. Otherwise we'll see everybody back here tomorrow, Crypto Town Hall, 10, 15 a.m. Eastern Standard Time. Thanks everyone, have a great day.